India, Pakistan to discuss pipeline

New Delhi and Islamabad are scheduled to discuss the safety of a proposed pipeline designed to transfer gas from Iran to India through Pakistan.

05 Sep 2004 10:02 GMT

Ties between the two neighbours have improved in recent months

Officials said the Indian Oil Minister Mani Shankar Aiyar and the Pakistani Foreign Minister Khurshid Mahmud Kasuri were to discuss the $3.5 billion pipeline proposal on Monday during the latter's three-day visit to India.

"If our security concerns are adequately addressed, this project could turn out to be the economic bedrock which could buttress many more economic cooperation proposals," an Indian Foreign Ministry official said on Friday.

"The economic gains for Pakistan, estimated at between $600 million and $800 million annually in transit fee alone, are a reasonable guarantee against sabotage" the official added.

Mutually beneficial

Negotiations on the 1600-km pipeline began in 1994, but no headway was made due to tensions between Pakistan and India and the project's massive cost.

Officials said improving bilateral ties between the two augured well for the project.

For Iran, which holds the world's largest gas reserves after Russia, the Indian market is as important as the European market, which it hopes to serve one day through a pipeline across Turkey.

India is a large importer of energy products, importing nearly 70% of its annual requirements.

The Pakistani foreign minister is visiting India to try and add impetus to a peace process set in motion in recent months.